Wednesday, February 13, 2008

BATON ROUGE -- The state agency that handles Road Home buyouts has made surprising discoveries during recent visits to more than 5,000 hurricane-damaged properties -- chief among them a smattering of dismayed homeowners who insisted they never sold their houses to the recovery program.

Contractors for the Louisiana Land Trust, which is responsible for landscaping and otherwise maintaining properties under the Road Home's control, also have stumbled upon lots still harboring occupied FEMA trailers, as well as some commercial buildings at the addresses provided in spreadsheets by the state's Office of Community Development, land trust Executive Director Nadine Jarmon said Tuesday. Commercial buildings aren't eligible for Road Home grants.

Glitches have arisen in about 5 percent of the 5,000 cases, and Jarmon traced the root of the problem to a more fundamental issue: Despite having to maintain buyout properties, the land trust has not received a single complete set of closing documents for any of the 5,161 properties that the state says it owns. Other problems could arise soon if the system is not streamlined, Jarmon told the Louisiana Recovery Authority board during its monthly meeting at Baton Rouge Community College.

Right now, we're basically taking their word that we own them," she said in an interview. "From here, the problem just kind of escalates, it dominoes."

The uncertainty about ownership status holds up various initiatives, Jarmon said. For instance, she said she has been working with federal officials to figure out whether the land trust can secure subsidies, either through FEMA's Public Assistance program or the Increased Cost of Compliance option of former owners' flood insurance policies, to cover some of the cost of demolishing buyout properties. Tapping either source would require proof of ownership, she said.

"For me, the big picture is you've got to be able to show ownership if you're going to advocate for any action on behalf of those properties," she said.

Documents in doubt

More important, without title documents, the land trust cannot turn over buyout properties to parish redevelopment authorities that are expected to return them to commerce, Jarmon said. Current estimates peg the eventual number of Road Home buyout properties in the range of 11,000 to 15,000, with at least 6,000 expected to end up in the hands of the New Orleans Redevelopment Authority.

"If we don't have our ownership documents, then there's something fundamentally wrong here," she said. "At some point, we just got to get it together."

A spokeswoman for the state Office of Community Development said that all sale and covenant documents for the transfer of Road Home buyouts are recorded at the parish level, while subcontractors handling closings for ICF, the state vendor running the grant program, are responsible for pulling together closing documents.

Spokeswoman GeGe Roulaine said that for the past several months, her department and ICF have been working with the land trust to put in place a computer system that will allow subcontractors to upload scanned images of all closing documents to a shared drive accessible by all parties. The process cannot be implemented fully, however, until the land trust finishes installing its own new computer system at its Baton Rouge offices, she said.

The land trust "did not want any paper documents. They wanted everything given to them only in digital," Roulaine said. "Until they're done developing their (computer management information system), we have to go with this temporary system of spreadsheets."

But in an interview, land trust consultant Terrie Walton responded: "Our computer systems are ready and our server is in place. We just need closing documents." Rechecking information

Jarmon said the land trust is ready to accept the documents, adding that she has been lobbying quietly for access to complete closing records for the past three months. She is expected to make her case today at 10 a.m. during a hearing of the state Senate's Local and Municipal Affairs Committee.

In the meantime, Jarmon said she wants spreadsheets compiled by the state community development office to be scrubbed -- with a new check on the accuracy of the property status information.

"The issue has been (in) the accuracy of the information that we get from OCD," she said. "Right now we have properties (on our list) that have FEMA trailers on them. We have people who are still living on the property who say they were told at the closing that they can stay."

The land trust said it found 156 properties with FEMA trailers, some of which were occupied. It said it could find no lot to correspond with more than 40 addresses on the state spreadsheet.

Another OCD spokeswoman, Laura Robertson, said simple typographical mistakes likely are to blame for erroneous addresses on spreadsheets that led land trust contractors to properties that were not sold to the state through the Road Home. As for several residents who, according to Jarmon, told land trust contractors that Road Home officials said they could continue living at their properties after agreeing to a buyout, "that has never been our policy," Robertson said. "They have to vacate immediately."